THIRD SECTION
DECISION
Application no. 66688/14
NOE METAL CONSTRUCTIONS S.A.
against Greece
The European Court of Human Rights (Third Section), sitting on 7 February 2023 as a Committee composed of:
Georgios A. Serghides, President,
Jolien Schukking,
Darian Pavli, judges,
and Olga Chernishova, Deputy Section Registrar,
Having regard to:
the application (no. 66688/14) against the Hellenic Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 6 October 2014 by a company registered under Greek law, Noe Metal Constructions S.A. (“the applicant company”), which was represented by Mr A. Avrantinis, a lawyer practising in Athens;
the decision to give notice of the application to the Greek Government (“the Government”), represented by their Agent’s delegate, Ms A. Magrippi, Legal Representative at the State Legal Council;
the parties’ observations;
Having deliberated, decides as follows:
SUBJECT MATTER OF THE CASE
1. The application concerns the allegedly unjustified deprivation of the applicant company’s possession consisting of the legitimate expectation that contracts signed with public companies would be respected.
2. Between 2009 and 2011 the applicant company entered into twelve contracts with the Hellenic Transmission System Operator (“DESMIE”) for the sale of electricity generated by solar panels. DESMIE was a corporation whose stock was held by the Greek State and the Greek Public Electricity Company. By Law no. 4001/2011, DESMIE was replaced, as regards those contracts, by a newly created company, the Electricity Market Operator (“LAGIE”).
3. In accordance with Law no. 3468/2006, as in force at the material time, producers of electricity from renewable energy sources, in particular from solar panels, could sell the electricity they produced at a rate calculated with reference to a base price, adjusted for inflation. The base price, expressly mentioned in that Law, was guaranteed for a period of at least twenty years and was reflected in the contracts, whose terms were identical, as they were prescribed by a decision of the Ministry of the Environment.
4. Law no. 4254/2014, published on 7 April 2014, amended Law no. 3468/2006, drastically reducing the base price in respect of the contracts in force. According to the applicant company, following the enactment of the amended Law, the company lost annual income in 2013 in the amount of 2,000,000 euros (EUR). During the remaining fifteen years covered by the contracts, the total loss of income would have amounted to more than EUR 30,000,000. The same Law also required that solar panel producers reduce their prices retroactively for 2013, offering a discount of 34% for solar panels connected to the energy transmission system prior to 31 December 2009 and 35% for panels connected in 2010 and 2011. As a result, a debt of EUR 1, 386, 485.08 owed by LAGIE to the applicant company was eliminated.
5. The applicant company asserted that no remedies were available in Greece by which to directly challenge a legislative act, such as Law no. 4254/2014, on the grounds that it contravened an international treaty.
6. The applicant company complained that, although it had had the legitimate expectation of selling electricity to the State at a fixed price over a twenty-year period, the reduction of the base price guaranteed by Law no. 3468/2006, combined with the elimination of the debt owed by LAGIE, both prescribed by Law no. 4254/2014, had resulted in a violation of Article 1 of Protocol No. 1.
THE COURT’S ASSESSMENT
7. The Government raised several objections as to the admissibility of the application, chiefly arguing that the applicant company had failed to exhaust domestic remedies in relation to its complaint under Article 1 of Protocol No. 1.
8. They submitted, firstly, that renewable energy producers, relying on various legal grounds, notably contract and tort liability, had brought actions in both the civil and the administrative courts seeking compensation for the damage allegedly arising from the application of Law no. 4254/2014. Those actions had been brought against either their counterparties (energy system operators) or the Greek State under Article 105 of the introductory Law to the Civil Code. The Government noted that, as of the date of the submission of their observations (29 March 2021), none of these actions for compensation had resulted in a final decision by the Court of Cassation or the Supreme Administrative Court and that no settled case-law was available.
9. The Government further submitted that renewable energy producers had brought proceedings before the Supreme Administrative Court seeking the annulment of the credit notes issued by their counterparties in connection with the discounts provided for by Law no. 4254/2014. The Court notes that the plenary formation of the Supreme Administrative Court, in judgments nos. 1944-7/2021 (12 November 2021) settling its previously contradictory body of case-law, ruled that the disputes resulting from the credit notes fell within the jurisdiction of the civil courts since the impugned measures had been adopted in the framework of private-law contracts.
10. In addition, the Government submitted that renewable energy producers had also lodged tax appeals against the above-mentioned credit notes with the administrative courts, arguing that the discounts provided for by Law no. 4254/2014 constituted a tax.
11. The Government noted that the domestic proceedings initiated by renewable energy producers had not been determined with final effect by the domestic supreme courts, and concluded that the applicant company had failed to exhaust domestic remedies because it had lodged its application without using any of the remedies available in respect of property disputes in connection with its complaint under Article 1 of Protocol No. 1.
12. The applicant company submitted that the remedies referred to by the Government, notably an action for compensation and an action seeking the annulment of the credit notes, would not be effective, as on the date of the applicant company’s submissions the cases brought by other renewable energy producers were still pending before the domestic courts, despite the fact that seven years had passed since the publication of Law no. 4254/2014 and the lodging of the applicant company’s application before the Court. In so far as the applications for annulment are concerned, the applicant company, noting the contradictory case-law of the Supreme Administrative Court in cases involving other renewable energy producers, argued that at the time of lodging its application with the Court, it had had full knowledge of the divergent case-law of the domestic civil and administrative courts concerning the classification of a contractual relationship and, therefore, of the issue with regard to the respective jurisdiction of those courts.
13. The applicant company argued that the Government had failed to discharge their burden of proof and produce evidence that at the time of lodging the present application there had been a domestic remedy available that satisfied in concreto the requirement of effectiveness. It argued that the Government had not cited any domestic decision from which it could be concluded in concreto that a domestic remedy had existed which was capable of providing redress for the producers of electricity and also offered reasonable prospects of success.
14. The general principles concerning the exhaustion of domestic remedies and the principle of subsidiarity have been summarised in Vučković and Others v. Serbia ((preliminary objection) [GC], nos. 17153/11 and 29 others, §§ 69-77, 25 March 2014). To be effective, a remedy must be capable of remedying directly the impugned situation and must offer reasonable prospects of success. However, the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust that avenue of redress. As regards the burden of proof, it is incumbent on the Government claiming non‑exhaustion to satisfy the Court that the remedy was an effective one, available in theory and in practice at the relevant time. Once this burden has been satisfied, it falls to the applicant to establish that the remedy advanced by the Government was in fact exhausted, or was for some reason inadequate and ineffective in the particular circumstances of the case, or that there existed special circumstances absolving him or her from this requirement. Furthermore, the effectiveness of a remedy does not depend on the certainty of a favourable outcome for the applicant (see Mamatas and Others v. Greece, nos. 63066/14 and 2 others, § 62, 21 July 2016). The Court also reiterates that an applicant’s compliance with the requirement to exhaust domestic remedies is normally assessed with reference to the date on which the application was lodged with the Court (Selahattin Demirtaş v. Turkey (no. 2) [GC], no. 14305/17, § 193, 22 December 2020).
15. In the present case the Court notes that other renewable energy producers which were in essentially the same legal situation as the applicant company challenged the provisions of Law no. 4254/2014 through various domestic proceedings, including on the grounds of a breach of Article 1 of Protocol No. 1. However, the applicant company did not use any of the remedies referred to by the Government. Instead, asserting that no remedy was available in Greece by which to challenge Law no. 4254/2014, it lodged its application directly with the Court less than six months after the entry into force of that Law. The Court also notes that both parties agree that the domestic case-law concerning claims based on an alleged violation of Article 1 of Protocol No. 1 as a result of the impugned provisions of Law no. 4254/2014 is not yet settled. The Court must therefore ascertain whether the applicant company, at the time of lodging its application, was dispensed from the obligation to use at least one of those remedies.
16. The Court notes that the applicant company did not dispute the availability of the domestic remedies referred to by the Government, but only their effectiveness in concreto. Its main argument was that, seven years after the entry into force of Law no. 4254/2014, there was still no settled domestic case‑law either on the issue of jurisdiction or on the merits of cases involving the compatibility of that Law with Article 1 of Protocol No. 1. The Court is unable, however, to subscribe to this line of reasoning.
17. Firstly, in the particular circumstances of the case, the applicant company cannot validly argue that at the time when it lodged its application, that is to say, just a few months after the enactment of Law no. 4254/2014, the available remedies were not effective in practice, as it is obvious that no settled case-law could have existed at that time on the novel legal issues raised by that Law.
18. Secondly, the fact that the domestic proceedings in other renewable energy producers’ cases are still pending goes against the main argument put forward by the applicant company. That argument relies on the assumption that the effectiveness of domestic remedies must be ascertained in the light of the subsequent development of case-law in proceedings in which it did not take part. It appears that the applicant company also considers that the effectiveness of these remedies is dependent not only on the existence of settled case-law, but also on the certainty of a favourable outcome for all other renewable energy producers in the pending domestic cases. However, as there is no settled domestic case-law, notably on the merits, the applicant company cannot assert that, at the time of lodging the present application before the Court, the existing remedies, which effectively gave rise to the pending cases introduced by other renewable energy producers, did not offer any reasonable prospects of success and were all doomed to fail (see, a contrario, Carson and Others v. the United Kingdom [GC], no. 42184/05, § 58 ECHR 2010). In any event, as noted above, the issue of jurisdiction in relation to annulment proceedings was settled by the Supreme Administrative Court (see paragraph 9 above).
19. Thirdly, the applicant company could not have predicted, at the time of lodging its application, and still cannot predict, the outcome of the actions for compensation brought by other renewable energy producers (see, mutatis mutandis, Mamatas and Others, cited above, § 64). Nor can the Court speculate on the outcome of those proceedings. The Court has found on many occasions that where legal systems provide constitutional protection of fundamental human rights and freedoms, it is in principle incumbent on the aggrieved individual to test the extent of that protection and allow the domestic courts to develop those rights by way of interpretation (see Vučković and Others, cited above, § 84). It sees, therefore, no reason to dispense the applicant company from its obligation to use at least one of the remedies available in the domestic legal order which was not obviously futile at the time of lodging its application before the Court. In the absence of special circumstances raised by the applicant company, a finding that it could be dispensed from this obligation would undermine the principle of subsidiarity.
20. The Court concludes, therefore, that the domestic courts were not afforded an opportunity to prevent or put right the alleged violation of Article 1 of Protocol No. 1 before the applicant company’s allegations were submitted to the Court.
21. Accordingly, the Court, upholding the Government’s plea of non‑exhaustion, concludes that the application must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention. In view of this conclusion, the Court does not find it necessary to examine the Government’s remaining objections as to the admissibility of the application.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 2 March 2023.
Olga Chernishova Georgios A. Serghides
Deputy Registrar President